The Table Below Is the Demand Faced by the Tienshan

question 166

Essay

The table below is the demand faced by the Tienshan Company, a monopolist that enjoys zero variable cost in its production of fine mineral water. $\begin{array} { c c } \hline \text { Price } & \text { Quantity Demanded } \\\hline \$ 2.50 & 60 \\2.25 & 70 \\2.00 & 80 \\1.75 & 90 \\1.50 & 100 \\1.25 & 110 \\1.00 & 120 \\0.75 & 130 \\0.50 & 140 \\0.25 & 150 \\0 & 160 \\\hline\end{array}$ a) What is the price Tienshan will charge and what quantity of output will it produce?
Suppose that Endless Journey Inc., which also has zero variable costs, enters this industry and assumes that Tienshan will continue to produce its current output.
b) What output will Endless Journey choose to produce and what will be the new market price, given both firms' output?

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Definitions:

Price Of Corn

Refers to the market rate or cost at which corn is bought and sold, influenced by factors such as supply and demand, weather conditions, and market trends.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition.

Equilibrium Quantity

The amount of products or services available and sought after at the equilibrium price, where the supply meets demand in the marketplace.

Complements

Goods or services that are often used together such that an increase in demand for one leads to an increase in demand for the other.